2024 (9) TMI 1345 - HC - GST

Wrongful availment of input tax credit while filing return in Form GSTR-3B, for the year 2017-18 - HELD THAT - The petitioner failed to make use of the opportunity given to him to respond to the notices issued prior to the issuance of Ext. P4 order. However, the fact remains that the input tax credit claimed in Ext. P5 was so claimed at a time immediately after the introduction of GST and when the procedures were not fully clear to all the assessees. It is also evident from the record that the petitioner had not utilized the input tax credit claimed in Ext. P5 and had actually filed Ext. P6 return in the month of August 2018, reversing the input tax credit claimed in Ext. P5. The petitioner is an honest taxpayer, who had noticed his mistake and had taken steps to rectify the same by filing Ext. P6 return during the month of August-2018. Section 39 (9) of the CGST/SGST Acts indicates that where a registered person is required to revise any return filed by him, the same has to be done before the 30th day of November of the year following the financial year to which such details pertain. Therefore, in the facts of the present case, the petitioner had time till 30.11.2018 to file an application for rectification of any incorrect particular in Ext. P5. The petitioner filed Ext. P6, reversing the input tax credit wrongly claimed in Ext. P5, in the month of August-2018. The writ petition is allowed by setting aside Ext. P1 and remitting the matter for fresh consideration of the 1st respondent, who shall pass fresh orders in the matter, after affording an opportunity of hearing to the petitioner.

Summary

Issues:
Challenge to demand for payment of incorrect input tax credit under GST for the year 2017-18.

Analysis:
The petitioner challenged an order demanding payment of Rs. 43,37,212, including interest and penalty, for wrongly availing input tax credit (IGST) of Rs. 21,03,944.02 while filing Form GSTR-3B in 2017-18. The petitioner claimed the mistake was due to a clerical error and rectified it by filing Form GSTR-3B in 2018, reversing the credit. The petitioner argued that the demand should be quashed based on Section 39(9) of the CGST/SGST Acts, allowing rectification until 30.11.2018. The Government Pleader contended that the petitioner failed to provide evidence of credit reversal and should have challenged the order through a statutory appeal instead of a writ petition.

The court acknowledged the petitioner's failure to respond to notices before the order was issued but noted the timely reversal of the claimed credit in 2018. Considering the circumstances of the case, where the credit was not utilized and rectified before any notice, the court deemed the petitioner an honest taxpayer. Section 39(9) allowed rectification until 30.11.2018, and the petitioner filed the reversal in August 2018, meeting the deadline. Consequently, the court allowed the writ petition, setting aside the demand order and remitting the matter for fresh consideration by the 1st respondent with a hearing opportunity for the petitioner. The 1st respondent was directed to issue fresh orders within three months from the specified date.

Additionally, the court declared that any fresh order by the 1st respondent following the judgment would not be affected by the time limits under Section 73(10) of the CGST/SGST Acts or assessment completion notifications for 2017-2018. The writ petition was granted accordingly, recognizing the petitioner's rectification efforts and adherence to statutory timelines for credit reversal.